Our guest today is Courtney Renaldo, Manager of Presales for Yardi. The discussion in this episode will revolve around the business case for optimizing energy in buildings and managing government requirements. With over 20 years of experience in this industry, she has seen substantial changes.

Courtney explains why real estate plays a pivotal role in making the world a greener place, along with why efficiency improvements result in many positives for building owners. She provides insight on easy changes that buildings are making along with what benchmarking metrics are becoming commonplace.

Topics covered include:

• Benchmarking for buildings that has become common in the past 10 years.
• Focusing on efficiency from the ground up.
• The easiest ways to make a building more efficient.
• What you must have in place before making any efficiency improvements.
• Improvements that can be made to older industrial buildings.
• When it’s time to consider major changes to reduce energy usage.
• Why making changes to environmental impact starts with real estate.
• The by-products Courtney has seen from making rental units energy efficient.
• Energy Star as the most common benchmarking solution.
• Requirements that are being rolled out by provincial governments.
• The increasing popularity of green financing.
• The importance of visibility to encourage reduction of energy use.
• A key factor in what type of efficiency score your building will achieve.
• How Yardi makes energy solutions easy for landlords.
• Making sure your building is working efficiently without sacrificing tenant comfort.
• The declining amount of people Courtney talks to who don’t know about conservation.

More about our guest…

Courtney has worked in all aspects of the utility industry for more than twenty years, including in billing, client services, sales support, implementation, project management and development. She joined Yardi in 2012 through the acquisition of ista North America Multifamily Services Group, where she had held three senior positions. As director of client services for Yardi Energy, Courtney supervised a team and ran an office of more than 75 employees working in client services, billing operations, implementation, cash management and call center functions. Today her focus is on finding the best products and services for our clients and prospects and on being an industry expert supporting our sales and marketing teams. She holds a B.A. in psychology from San Diego State University.

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Jonathan Gitlin, President and CEO of RioCan, is making his third appearance speaking with Adam and Aaron. Jonathan gained the CEO title since his last episode after being the President of the company since 2019.

We get deep into RioCan’s operations, including how the company has performed throughout the COVID-19 pandemic and dealt with the false “retail is dead” narrative. Jonathan also discusses why RioCan is excited about new condo builds and what is needed to aid Canada’s housing affordability crisis.

Topics covered include:

• RioCan’s heavy weighting in major markets and if that was helpful during the pandemic.
• Extracting value out of existing properties and why analysts sometimes don’t understand this approach.
• The condo model that RioCan is focused on.
• Showing, through results, that the retail market is alive and well.
• Why building condos can offset the cost of multi-unit rentals.
• Advantages to having a large land bank when you’ve got aggresive growth plans.
• The operations of RioCan now versus one year ago.
• Retail spaces as distribution centres.
• How Jonathan ended up as CEO of RioCan after starting his career as a lawyer.
• What RioCan looks for when selecting a partner.
• The supply constraint that largely contributes to affordability issues.
• An impressive CMHC policy that Jonathan wishes he saw used more.
• What Jonathan sees as the 5-to-10-year vision for RioCan.
• Continuing to be reactive to the needs of tenants.

More about our guest….

As President and Chief Executive Officer, Jonathan leads RioCan’s major market strategy to evolve Canada’s most adaptable portfolio and drive unitholder value. His focus is on delivering sustainable growth, supporting RioCan’s position as an industry leader in ESG practices, and fostering a results-driven corporate culture.

Since joining RioCan in 2005, Jonathan has been instrumental in reshaping the Trust’s portfolio, from managing its secondary market disposition program to launching RioCan’s residential portfolio, RioCan Living. He is a decisive and dynamic leader who works closely with the highly experienced senior management team to mobilize and empower RioCan’s expert talent. Prior to joining RioCan, Jonathan was a real estate lawyer at McCarthy Tétrault LLP. He graduated from Osgoode Hall Law School in 1998, and holds a Bachelor of Arts degree from The University of Western Ontario

This episode is sponsored by Stewart Title.

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Jonathan Gitlin on the CRE Podcast in 2018: Episode.

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Marlon Bray, Senior Director of Cost Consulting at Altus Group, is our guest in this episode. This role has Marlon as a jack-of-all-trades throughout the development life cycle, and he says he’s all about adding value and reducing risk.

There has been a huge increase in hard costs as we’ve progressed through 2021, so Marlon explains why this has happened and where we can expect prices to go from here. He also touches upon affordable housing in Canada and why he thinks revenues will continue to rise.

Topics covered include:

• Best practices for profitability.
• Projects becoming non-viable due to the recent increase in hard costs.
• The outlook on lumber prices in the next 12-18 months.
• Why it’s more difficult to build extremely profitable assets these days.
• Increased costs of other building materials.
• Challenges with building tech because development is so risky.
• Only using technology if it presents a clear benefit.
• Why modular housing is similar to manufacturing.
• Solving the problem of upcoming retirements on the labour side.
• Efforts by the Ontario government to recruit more tradespeople.
• How much time Marlon spends on deals that never come to fruition.
• The continuous rise in rent and why Marlon believes it will continue.
• Difficulties with land prices, such as sellers asking for their future value today.
• The lack of supply in Canada which is made more difficult by different levels of government.

More about our guest:

Marlon is the head of Altus Group’s Ontario pre-construction and contract administration services as part of the Cost and Project Management team.

With over 25 years of experience, specializing in budgeting, value optimization, and providing visibility on risk through the entire lifecycle from early due diligence through to completion. Marlon oversees a team that leads the way with cutting-edge estimating technology and data analytics, bringing a greater level of transparency, and added value to all projects he is involved with.

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We are welcoming Matt Picken, Head of Capital Markets for Canada at JLL, as our guest in today’s episode. In addition to being involved in the execution of investment transactions in every asset class, mentoring is another area that Matt is passionate about.

Matt goes over how the real estate market is performing today compared to the beginning of the COVID-19 pandemic, along with how he believes the future will look. With so much expertise in land transactions, he explains what types of land are popular right now before talking about the networking he facilitates.

Topics covered include:

• Why Matt doesn’t see any reason for cap rates to increase or rent to decrease.
• Networking in the age of COVID.
• Traditional industrial tenants who are now looking to buy property.
• Changes in tenant attitudes when looking for industrial space.
• Large institutions continuing to chase land that is close to transit.
• How smaller companies stay competitive when buying land.
• Optimism towards the market today versus the start of the pandemic.
• Why it’s way too early to think that office space is dead.
• Reverse migration happening to Canadian cities.
• The continued importance of transportation access.
• Matt’s accidental path that led him to real estate.
• The sense of care and community within the real estate industry.
• Changing buyer preferences and accommodating those desires.
• How Matt made connections in the early days of his career.
• The challenges Matt is seeing in trying to hire right now.

More about our guest…..

With over 20 years’ experience in commercial real estate advisory and investment banking, Matt has worked for many of North America’s leading investors – from pension funds and REITs to private equity funds and family owned firms. Over his career, he has been involved in more than $10B in transactions, advising on many of Canada’s largest development and income property transactions.

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First National’s Darryl Bellwood is our guest in this episode. He is best known for working with some of the biggest borrowers in the country, as well as having a major presence in Ottawa.

Darryl gives an overview of how multi-unit properties have performed throughout the pandemic along with different strategies used by private versus public companies. He explains why Ottawa is such a great market for real estate and the type of growth he expects to continue there as we exit the pandemic.

Topics covered include:

• Reasons why publics and privates are buying right now.
• Using capex to adjust investment strategies.
• Why compressed cap rates and increased value requires less leverage to be used.
• The changes Ottawa has undergone in the past few decades.
• The advantages of REITs using shares in an acquisition.
• Buying criteria for the large borrowers.
• Tax advantages that public companies can have over private ones.
• What happened in Ottawa during the pandemic, including why some areas were unaffected.
• Intensification areas and the effects of higher construction material costs.
• How Darryl became focused on the Ottawa market.
• Fear at the beginning of the pandemic surrounding tenants not being able to pay.
• Why the apartment market has stayed active throughout COVID-19.
• The tight-knit real estate market in Ottawa.
• The growth that Darryl believes will continue in the nation’s capital.

More about our guest…

Darryl Bellwood has over 20 years of experience in the commercial real estate sector and currently holds the position of Assistant Vice President with First National Financial, Canada’s largest non-bank lender. He has extensive experience in the multi-family sector and has funded more than $8 billion in commercial mortgages.  A graduate of the University of Toronto, Mr. Bellwood is a member of the Mortgage Professionals of Canada, holds a mortgage agent’s license with FISCO and has written a number of articles for various industry publications.

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Returning for his third podcast appearance today is Jim Costello, the Senior Vice President at Real Capital Analytics. As an economist, Jim looks at the commercial real estate world and helps people understand the intersection between the performance of the market and the capital that flows into it.

With a far-reaching knowledge regarding global flows of capital, Jim gets into how that flow into real estate has changed since his pre-pandemic guest appearance. We hear about why Canadian real estate is so sought after and how its current market stacks up against the rest of the world.

Topics covered include:

• Why Canadian investors prefer investing in other developed countries.
• Where most overseas money flowing into Canada comes from.
• Focusing on investment in the largest cities.
• Currency fluctuations when investing internationally.
• Why Toronto’s real estate is less liquid than cities such as New York and London.
• How the apartment sector has become an institutional investment class globally.
• The rise of alternative CRE in Canada and globally.
• Redirection of capital that began in Spring 2020.
• The majority of the world’s population being prime working age and what that causes.
• Coming out of COVID-19 restrictions and what that means for investment.
• Older-aged populations deploying less capital.
• A story of foreign investment gone wrong.
• Why Jim thinks land is a wild asset class, especially in China.
• The increase of self-directed investments and positioning teams around the world.

More about our guest….

Jim Costello is an economist who analyzes the commercial property markets. Jim communicates stories on market performance to clients of Real Capital Analytics by way of writing and presentations.

Jim has worked in the commercial real estate space on issues of urban economics since 1990, including a 20-year stint with CBRE’s Torto Wheaton Research team. Jim expanded the reach of the Torto Wheaton Research team developing forecasts of global market fundamentals. He also developed approaches to answer investor questions on asset values and relative investment opportunities. Jim provided advice to the Treasury Department and other policy makers in the aftermath of the Global Financial Crisis and helped educate these professionals on commercial real estate performance.

Jim is a member of the Counselors of Real Estate. He is also a member of the Commercial Board of Governors of the Mortgage Bankers Association.

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On the podcast today is Colin Johnston, President – Research, Valuation & Advisory, Canada at Altus Group. With such a large volume of data going through Altus Group, Colin discusses how his company uses data to increase performance and yield of real estate.

Several important real estate metrics are compiled and released annually in Canada, but Colin explains why the instantaneous data collected at Altus Group is so much more valuable. Colin also analyzes the current market for retail properties, including the rebound in foot traffic around and the world and how tenants are minimizing risk.

Topics covered include:

• Closure of retail stores in 2020 versus 2019.
• Why most recent retails deals have been led by the private investors.
• Tenants attempting to shift risk to the landlord.
• What type of retail fared better than others.
• Shifting ownership types for retail.
• The struggle of malls during the pandemic.
• Why online-only retailers are now looking to start brick-and-mortar locations.
• Foot traffic seen at retailers today compared to pre-pandemic.
• Malls in the US being underwritten at land value.
• Repurposing malls in the US and Canada.
• The end vision for the data strategy at Altus.
• Competing for land on the periphery of major urban centres.
• Ghost kitchens as a potential use for former retail spaces.

More about our guest:

Colin Johnston is the President of Altus Group’s Research, Valuation and Advisory division in Canada, a group comprised of over 400 appraisers, economists, planners, advisors and data scientists. Altus is a leading provider of independent software, data solutions and consulting services to the commercial real estate industry. During his 25 plus years in the industry, Colin has become one of the country’s pre-eminent valuation and advisory professionals, with a particular emphasis on investment institutional assets.

Colin has spoken on numerous panels, written several papers on valuation, PropTech and served as an expert witness in dispute cases. He is an active member of several industry associations, a designated member of the Appraisal Institute of Canada and a Fellow of the Royal Institute of Chartered Surveyors.

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In this episode, Aaron and Adam are joined by another member of the First National family: Andrew Drexler. He is the Assistant Vice President and possesses a skillset gained from participating in large, complex deals. He has done some of First National’s biggest deals, including The Well in Toronto.

Andrew starts off by discussing construction in the midst of the pandemic, along with why cap rates are not as important as some may think. He gives us a rundown on some of First National’s biggest projects and explains why student housing is an attractive area for investment.

Topics covered include:

• An overview of The Well and its massive scale.
• Demands for amenities from modern renters.
• Managing the capital stack for a development project.
• The challanges of financing mixed-use assets.
• Why small differences in cap rates on new buildings are mostly irrelevant.
• Why real estate financing has become more complicated.
• Why Canada is experiencing a rental construction boom .
• The Humaniti project in Montreal and why it was so complicated.
• The need for affordable housing nationwide.
• Building for the long-term.
• How student housing has evolved into a lucrative asset class.
• The high amount of turnover in student housing and why it’s a good thing.
• How operators are dealing with a dip in international students.
• The healthy spread between cap rates and interest rates with student housing.
• The importance of being a great operator to satisfy the needs of student renters.

More About Our Guest….

Andrew has been a part of the First National Financial commercial team for over 15 years, and has originated more than $4 billion in commercial financing. For Andrew, reputation is everything. He builds his by consistently being a trusted advisor to his clients, adding the value of his honesty and expertise. Andrew has originated debt across the country and across all asset classes. That diversity shapes his perspectives and defines how he evaluates opportunities and identifies the value inherent in a deal. Working at First National, Andrew feels encouraged to put client needs ahead of his own and communicate frankly and honestly. It’s how he’s built his reputation and contributed to First National’s reputation as well.

Industry involvement:  Andrew is a contributor to Canadian Apartment Magazine on topics including new construction financing.

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Today we’ve got Daniel Marinovic on the show. He is the CEO and Managing Partner of Forest Gate, a newly created private equity, private debt real estate investment firm. David left his very successful career in institutional real estate and traded it in for an investment thesis, raising some capital and launching his own shop. He’ll give us insight on what it’s like starting a new entity in the industry in 2021.

Daniel talks about why he wanted to form Forest Gate and what he envisions for the young company. We hear his thoughts on the moves that have happened from big cities to smaller areas and what the future of working from home will look like.

Topics covered include:

• The Golden Horseshoe investment thesis.
• The creation of suburban office strategies.
• The target IRR that Daniel is aiming for at Forest Gate.
• Daniel’s vision for deployment and use of debt in his company.
• Daniel leaving his successful career at DREAM Unlimited to start his own shop.
• Learning what a K-shaped recovery is and why this influenced Daniel’s decisions.
• People leaving large cities and the future of working from home.
• Challenges of starting a company from scratch.
• The need for real estate to get to the market sooner.
• Smaller suburbs beginning to come of age.
• The increased cost of building materials during this year.
• Forest Gate’s ability to pivot and their current focus on residential units.
• Growth projections for Forest Gate and Daniel’s desire to have a smaller company.
• What kind of culture Daniel wants to foster.

More about our guest….

Prior to Forest Gate, Daniel Marinovic served as Chief Development Officer with Dream Unlimited (TSX:DRM) a leading Canadian developer and asset manager with $8 billion in assets under management. Hisresponsibilities spanned all aspects of the organization including finance, development, construction, and operations. Daniel was also Vice-President of Finance with First Gulf, the commercial arm of Great Gulf, one of Canada’s most recognized home building and development organizations. In his career, Daniel has spent 20 years leading high-profile, complex real estate development and investment projects in municipalities across the country. Daniel is on the Board of Directors of Toronto Artscape Foundation and volunteers his time with a number of other industry and non-profit organizations.

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Our guest today is Colin Baryliuk, Executive Managing Director of Investments at KingSett Capital. He has been with the company since 2008 and he shares how tthe company has grown and evolved over that time.

We learn about the different funds managed by KingSett, their investment strategies and yield targets. Colin explains the biggest drivers in the success of the funds he manages along with where he sees great opportunity for real estate investment.

Topics covered include:

• The profiles of the funds managed by Colin and KingSett.
• Where the boundary lies for the growth fund due to risk tolerance.
• The IRR threshold that Colin uses to measure a successful investment.
• Why it’s so important to be fast when pivoting.
• The foundation of values instilled at KingSett.
• Doubling equity every 5 years.
• Never saying “no” to a meeting.
• Three aspects that are critical to KingSett’s capital deployment.
• The acquisition target for KingSett’s growth fund.
• Reasons why the interest rate usually does not greatly affect returns.
• A value-add opportunity that Colin is excited about.
• Investing in data centres.

More about our guest…..

Colin Baryliuk is the Executive Managing Director, Investments at KingSett Capital, Canada’s leading private equity real estate investment business co-investing with institutional and ultra-high net worth clients seeking to provide sustainable premium risk weighted returns through its various fund strategies. Colin is responsible for sourcing, structuring and negotiating the acquisition and disposition of real estate opportunities across Canada.

Founded in 2002, KingSett has raised $12.3 billion of equity for its Growth, Income, Urban, Mortgage and Affordable Housing strategies. KingSett owns interests in a $19 billion portfolio of assets. KingSett continues to seek further opportunities to invest in a wide range of real estate properties, developments, joint ventures and mortgage lending.

Colin was formerly Vice President at BMO Capital Markets Real Estate Group, where his role included real estate brokerage, mergers and acquisitions, due diligence and valuation in all asset classes throughout North America.

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